The rental market has become increasingly complicated and slightly unpredictable as people across the country struggle with unemployment, financial challenges and health concerns due to the COVID-19 pandemic. While it may be difficult to gauge how renters will respond as the coronavirus continues to spread across the US, the 2020 Zillow Group COVID-19 and Renters Report, conducted in May 2020, sheds some light on renters’ mindsets during these difficult times.

For many renters, the desire or need to move remains largely unchanged, but uncertainty surrounding COVID-19 and finances has meant many are pressing pause on moving plans and holding off on making decisions until the coronavirus crisis has passed. Many of those who are thinking about finding a new home to rent say their expectations towards affordability and rent prices have changed.

For landlords and property managers trying to navigate the waters ahead, it’s important to understand where renters are at and the new set of challenges they face. Meeting their needs and expectations requires paying attention to safety protocols and getting creative about motivating renters to feel confident about making their next move. 

Download our data sheets to learn more about how Covid-19 has shifted multifamily and single-family renter expectations around safety protocols and rent prices. 

Serious COVID-19 concerns influence renter sentiment

As case numbers remain high nationwide, the COVID-19 pandemic continues to have a significant impact on renters. According to the report, 75% of current or prospective renters said they were very or quite concerned about the coronavirus, 22% said they were somewhat or slightly concerned, and only 3% reported being not concerned at all. Most renters (60%) reported that they were very closely following the news on COVID-19 updates, while only 2% of renters said they were not.

With uncertainty and anxiety surrounding the pandemic, many renters are cancelling or holding off on plans to move. About half (55%) of current/prospective renters had suspended their plans to rent a new home in the wake of the coronavirus pandemic. Of those with plans on pause, 82% said they would resume their plans to find a rental when the crisis has passed.

For renters looking to move and rent their next home, 60% said their moving date was flexible or negotiable, 18% said their moving date was not flexible or negotiable and 22% said they weren’t sure.

At the time of the study, 22% of renters had leases ending in 6 months or less; 24% had leases ending in 7-12 months; 14% had leases ending in 1-2 years, and 4% had leases for beyond two years. Another 16% of current renters were on month-to-month leases, and 19% were renting without a lease.

Feeling the financial impact

As a result of COVID-19, many renters have experienced financial difficulties. According to the survey, almost half (49%) of all current and prospective renters who were employed at the start of the COVID-19 pandemic experienced a negative employment shock of some kind. In April 2020 as the pandemic spread, nearly 3 million renters — most of them Gen Z — moved back home to live with parents or family.

The broader consequences of this may still be hard to pin down, but it is obvious that perceptions towards affordability are shifting. The report shows that 28% of current or prospective renters say they have decreased the amount they’re willing to pay in rent (compared to just 17% who have increased the amount they are willing to pay). At the median, $1,400/month is the most renters say they want to pay for their next rental. However, the typical renter that moved in the past year reports a monthly rent bill of $1,000 — indicating that, while many renters consider $1,400 their max, they typically opt to rent for significantly less.

As feelings towards affordability change, renters say they are now looking to landlords and property managers to offer some form of motivation, in the form of incentives, to get them in the door. In fact, 52% of surveyed renters said they thought it was slightly, moderately or extremely likely that landlords would offer them leasing incentives when they looked for their next rental. Potential incentives that landlords and property managers can consider include early payment discounts, rent decreases, property upgrades, flexible lease terms, offering free first months or zero or partial security deposits.

Moving towards the future

As renters become more confident and start feeling ready to move forward, many may look for a change of pace, which may mean upgrading to a single-family home. Right now, 28% of current renters live in single-family detached homes and 18% report living in multifamily apartments (with 50 units or more). But among prospective renters looking to move, 41% hope to rent a single-family home, while 9% say an apartment in a multifamily building is where they hope to rent next.

Home ownership remains a long-term goal for nearly three-quarters of renters. As such, the driver behind the appeal of renting a single-family home may be that it is an opportunity to first try one out as a tenant. However, the underlying reality is that a majority (71%) of renters said they still plan to rent their next home. 

Affordability and budget will likely continue to drive renters towards more cost-effective options. The majority (82%) of those that moved into a new rental in the past year say that staying within budget is very or extremely important. In terms of importance, this factor tops all other home characteristics that single-family houses tend to offer, including square footage (45%) and private outdoor space (40%).

Interestingly enough, the desire to move to a new rental didn’t appear to be exclusively related to working from home and needing a home office. Half (50%) of renters do not have a home office room or space in their current home and less than half (46%) said a dedicated office space is very or somewhat important to them.  

Most urbanites want to stay in cities, but future renters may consider a shift to the suburbs

The work-from-home trend spurred by COVID-19 has freed workers in certain sectors to move away from pricey metropolitan areas, but many renters seem content to stay where they are. Among the current or prospective renters surveyed who are currently living in urban areas, 22% say they want to live in a more suburban area, but 35% said they want to live in an even more urban area. For renters already living in suburban neighborhoods, about one-third (33%) want to live in an area that’s even more suburban. Only 12% of these renters want to live in a more urban area, while 13% want to live in a more rural area. 

The trend towards staying put continues with renters currently living in a rural area, of whom 23% want to live in an even more rural area when they move. Another 15% want to live in a more suburban area, and just 8% want to live in a more urban area. While rural renters are likely to desire staying put, Zillow research has consistently found that, even during a pandemic, renters are more likely to move out of a rural area than an urban or suburban one. Even with the growing trend of work from home and remote tech, renters continue to gravitate towards urban and suburban areas.

Health and safety is a priority

In parallel to the considerable concerns surrounding COVID-19, health and safety is very important among renters. Renters expect landlords, property managers and real estate professionals to provide adequate safety measures during any interactions, both while the coronavirus is happening and after it has passed.  

While the coronavirus pandemic is ongoing, 75% of current and prospective renters prefer to avoid shaking hands or making in-person contact with real estate professionals. When in-person interactions do occur, 74% of renters say they prefer maintaining a 6 foot distance and 69% prefer requiring everyone to wear PPE. 

Interestingly, 63% say they prefer no in-person interactions at all and 68% of renters would prefer to interact virtually via email, phone, video conferencing or similar online tools. As remote touring tools and technology have grown in popularity, this is an important detail for landlords and property managers to note. There is an opportunity to improve the rental experience by leveraging such tools and making it easier for renters to search and find homes.

In the post-pandemic world, a majority of renters say they would like to see many of the safety established safety measures stay in place: 69% said they prefer to continue no-contact interactions; 69% said they prefer to continue maintaining a 6-foot minimum distance and 59% said they preferred continuing requirements for all parties to wear PPE.

For landlords and property managers looking to find their next tenant, the top channels of communication for prospective renters are primarily digital. Among those looking to move and rent their next home, 66% are using or anticipate using a website via laptop or desktop, 56% are or anticipate using a mobile website and 52% are or anticipate using an app on a smartphone or tablet. Traditional channels such as word of mouth and real estate professionals are, however, still relevant. More than half (56%) of renters said they used or would use their social networks (friends, colleagues, neighbors) to find their next rental and 44% said the same about a real estate agent or broker.

Takeaways

• Many renters are feeling financial strain due to the pandemic. Consider offering rental incentives such as early payment discounts, rent decreases, property upgrades, flexible lease terms, offering free first months or zero or partial security deposits.
• Consider marketing features that appeal more to renters now, like square footage and outdoor space.
• Be aware of renters’ safety concerns and continue to offer options for social distancing and no-contact interactions during in-person viewings and interactions.
• Adopt remote touring and similar technology that could help improve the experience for renters and allow them to search for homes remotely and safely — even if they’re not quite ready to move just yet.

Renter data sheets: Free download

Learn more about renter preferences for remote touring and digital tools.

• Multifamily renters
• Single-family renters